Mark Carney Says Monetary Policy Still Controls Inflation

What changed

Bank of Canada Governor Mark Carney told the Standing Senate Committee on Banking, Trade and Commerce that monetary policy remains effective at controlling inflation, despite the sharp movements and wide swings in interest-rate spreads during recent financial-market turbulence.

The statement reaffirmed the Bank’s 2 per cent inflation objective and explained how monetary policy continues to influence inflation even when financial markets are unsettled.

Why it matters

Volatile interest-rate spreads can make the path from a central bank’s decisions to the wider economy look less direct. Carney’s message is that this turbulence does not erase the Bank’s ability to pursue its inflation target.

That matters because the statement is about the machinery of policy, not a new rate decision. It offers reassurance that the Bank still sees its tools as capable of shaping inflation, even when market pricing is swinging sharply. For businesses and institutions planning around borrowing costs, the practical takeaway is simple: unsettled spreads may complicate the signal, but they do not make monetary policy irrelevant.